Leaders set the tone for the entire workplace. Employees will observe and interpret what a leader does or says, and will adjust their own behavior accordingly. That’s why it’s so important for leaders to understand the right — and wrong — ways to use humor in the workplace, so the organization as a whole benefits.

My colleagues (Michael Christian, Zhenyu Liao, Jared Nai) and I wanted to understand the impact that a leader’s jokes can have on the behaviors and actions of his or her employees. In a new research paper forthcoming in the Academy of Management Journal, we found that a leader’s use of humor can be a mixed blessing, with sometimes surprising effects on organizational behavior. Indeed, we found that humor can lead to unintended negative behavior among employees.

We collected data from employees in China and the U.S. over three different points in time, each separated by roughly two weeks. In the first survey, we asked employees to report how humorous their leaders are in the workplace. Then, in the second survey, we asked employees to report their relationships with their leaders as well as their perceptions of how acceptable norm violations (i.e. doing something that goes against generally accepted behaviors) are at their workplace. In the final survey, we measured participants’ self-reported work engagement and behaviors.

As we analyzed the data, we applied the concept of benign violation theory (BVT), first developed by behavioral scientist Peter McGraw at the University of Colorado, Boulder. McGraw and colleagues at the Humor Research Lab (HuRL) came up with BVT as a way of answering an age-old question: what makes things funny?

In a nutshell, the theory says that there are three factors for a situation to be humorous: 1) it is seen as a violation (in other words, it goes against accepted norms of the way things should be); 2) it is benign (it isn’t directly threatening); and 3) these factors are occurring simultaneously (it won’t be funny if they happen separately).

Placing this concept into the workplace context, we merged it with another theory, known as social information processing. This focuses on how employees interpret their leaders’ actions as cues for how to behave in the workplace, therefore determining where the boundaries lie in terms of which kinds of behaviors are considered to be “acceptable.”

By combining these theories, we looked at how a leader’s expression of humor signaled the acceptability of norm violations in the workplace. If that acceptability was seen to be high, for example, it could lead to followers engaging in increasingly deviant behaviors, defined in our work as things like being chronically absent from work, ignoring a manager’s instructions, sharing confidential information, falsifying financial claims, or drinking alcohol on the job.

Our analysis found that humor can produce a broad range of effects on organizational behavior. On the one hand, it can improve how team members view their social relationship with their leaders — something we refer to as leader-member exchanges (LMX) — which in turn leads to better work engagement among employees, meaning they become more attached to their jobs, more hard working, more enthusiastic, and more productive. However, some forms of humor on the part of a leader can also act as a powerful signal to team members that it’s OK to break the rules in negative ways.

Our study found that an important factor was the degree to which leaders used aggressive humor, such as teasing staff members or telling dirty jokes. Here our results showed that leaders who are seen as pushing this more risky form of humor were more likely to pave the way for employees to behave badly, and least likely to build a sense of work engagement on their teams.

Our findings shouldn’t be seen as a message to stop telling jokes at work, or even a reason to put humor coaches out of a job. The evidence remains clear that humor is an important tool for bosses to successfully motivate their teams to achieve greater performance. Nonetheless, while humor can be an effective organizational tool, our study reinforces the message that leaders must also be mindful of their status as role models. Due to their position, their actions serve as social cues for their employees, resulting in both positive and negative consequences. Managers should be careful about how they portray themselves to their teams, increasing their self-monitoring skills and becoming more aware of what types of humor are appropriate in different situations.

A joke may start out as “just a joke” — but for managers in particular, its impact can have far-reaching consequences.